Cryptocurrency mining consuming more electricity than Iceland’s homes

The computing power used to mine virtual currencies in Iceland could consume more power than all the country’s homes this year.

Iceland is an attractive location for datacentres with its cool climate, open spaces and relatively cheap renewable energy. This makes it attractive to digital currency miners that use vast amounts of energy.

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Digital coin miners can earn money by investing a few thousand euros in the right equipment – but electricity bills can eat into their profits.

Johann Snorri Sigurbergsson, business development manager at Icelandic power company Hitaveita Sudurnesja, told AP News that he expected Iceland’s virtual currency mining to double its energy consumption to about 100MW this year – more than the power used by all the households in Iceland, which has a population of just over 330,000.

Digiconomist estimated that the mining of bitcoin, the best known cryptocurrency, uses 15TWh a year globally, which is enough to light the Eiffel Tower for 250 years.

Politicians in Iceland are looking at taxing the profits of cryptocurreny miners, Smari McCarthy of Iceland’s Pirate party told AP News. “Under normal circumstances, companies that are creating value in Iceland pay a certain amount of tax to the government,” he said. “These companies are not doing that, and we might want to ask ourselves whether they should.”

The cryptocurrency market reached an estimated $27bn by April 2017, according to a global study published by the University of Cambridge. The Global cryptocurrency benchmarking study showed there are currently 2.9 million to 5.8 million cryptocurrency users globally.

A recent study of the cryptocurrency market from 2013 to May 2017 carried out by City, University of London and published in the Royal Society’s Open Science Journal looked at 1,500 cryptocurrencies. It found that bitcoin, which has the largest market share, has been steadily losing ground to its immediate rivals. It also found that an average of seven cryptocurrencies are created each week and about the same number disappear.